What is a Transfer of Equity?

The transfer of equity is a legal term for the process in which ownership of a share or interest in a property is transferred from one entity to another, in other words, a partial transfer. A clearer and more concise definition is that which refers to transfer of equity as a process in which a person is added to or removed from the deeds to a property. 

An equity transfer can be a complex operation and involve a series of forms and the submission of different documents. In these circumstances, the presence of a lawyer or legal specialist to handle all the paperwork is always recommended. 

Reasons to make a transfer of equity

Transfer of equity can be carried out for multiple reasons. Although there are other reasons, some of the reasons are more common than others, such as the following:

  • Marriage or common-law partnership: when people get married, they often transfer the property to be in both parties’ names
  • Divorce or separation: when a couple divorces or separates, property is usually transferred with some compensation (in the case of a joint mortgage, permission from the entity that offered the mortgage is also required)
  • Tax planning: owners can transfer capital to their children or other family members to manage their tax obligations

The more complex the situation, the longer the process can take. This can occur in cases of separation where one spouse does not consent to the transfer or when there are problems with mortgage payments. Otherwise, if all parties agree, the process of such a transfer does not take long. 

We hope that this text has helped you understand the importance of this process and in what context it is used.

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